THE TICKER

President Trump faces some bracing warning signs that voters are souring on his economic stewardship, according to a new Washington Post-ABC poll, a key data point that could endanger his 2020 reelection.

The fresh numbers reveal that for the first time in over a year, Trump’s handling of the economy is earning him overall negative reviews from voters. By a slim margin of 47 to 46 percent, voters now say they disapprove of the president’s leadership on the issue, the first time since August 2018 that his score on that measure in the poll slipped underwater. 

That, along with other results from the survey showing voters turning further against Trump’s economic management, offers what should be a wake-up call to a Trump team focused on a surprisingly durable economic expansion to help power the president’s reelection bid. 

And while pollsters say a less polarizing president would be enjoying higher marks for what has been a healthy economy, Trump has received his strongest reviews from voters on the matter. (The Post-ABC poll, for example, shows Trump earning a significantly worse grade on his overall performance, with only 38 percent of voters saying they approve of his handling of the job and 56 percent saying they disapprove.)

The new results show voters may be reassessing Trump's economic leadership as his trade war drags on, with little hope in sight for a major win, and as more hints of a looming recession creep into the picture. 

Voters are giving Trump an emphatic thumbs-down on his prosecution of the trade offensive against China, with only 35 percent saying they approve while 56 percent say they disapprove, according to the poll. And a strong plurality, or 43 percent, say the president’s trade and economic policies are driving up the potential for a recession in the next year. Sixteen percent said they are decreasing the odds of a downturn, while 34 percent said they make no difference. 

"Many worry about a personal financial cost of the trade war, with 6 in 10 saying they are concerned that the current dispute with China will raise the price of things their family buys, including one-third who are 'very concerned' about this," my colleagues Toluse Olorunnipa and Scott Clement report in their write-up of the poll results this morning. 

Respondents appear to be reevaluating Trump’s track record against the backdrop of an economy that seems to be on shakier ground. Voters still give the economy positive marks, but by a slimmer margin in the Post-ABC poll — 56 percent to 43 percent — than at any other time in Trump’s presidency.

And an eye-popping 60 percent of respondents expect the economy to slide into recession in the next year, compared to 35 percent who expect it won't. That attitude approximately mirrors sentiment the same survey measured before the financial crisis, in November 2007, when 69 percent expected a recession while 28 percent did not. 

The poll shows voters taking a dimmer view of Trump’s performance after a chaotic couple of months. Back in early July, the Post-ABC survey found the president's approval rating had climbed to 44 percent, the highest of his presidency per the poll. The numbers out this morning show him reverting to his support levels back in April. 

That same week, an AP-NORC poll found voters turning against Trump’s economic policies, as well. As we noted at the time, the survey showed “only 17 percent say they received a tax cut. And they take a dark view of the president's approach to renegotiating the country’s trading relationships, with 15 percent saying tariffs will help them and their family, and 26 percent saying they will help the national economy. Last August, 40 percent said tariffs would boost the economy.”

Partisanship is playing an increasingly powerful role in shaping voters' economic assessments, the poll finds. "Nine in 10 Republicans say the economy is in excellent or good shape, compared with 33 percent of Democrats. The 57-point partisan gap is far larger than any seen previously during the Trump administration or during the Obama administration, in which the largest divide was 43 percentage points," Toluse and Scott write. 

The president himself has demonstrated a sensitivity to the potential for the economy to head south. Per Politico, he sent nearly 30 tweets just in August needling the Federal Reserve, his preferred economic bogeyman, arguing the central bank has hamstrung growth by failing to cut interest rates far and fast enough. In one, he identified Federal Reserve chair Jerome Powell as the “enemy.” 

Powell however is broadcasting a rosier outlook, dismissing the threat of a recession in a Friday appearance. “The most likely outlook for our economy remains a favorable one with moderate growth, a strong labor market and inflation moving back up close to our 2% goal,’’ he said. 

That said, the economy undershot economists’ expectations by adding 130,000 jobs in August, per Friday’s jobs report. “The hiring slowdown comes as broader economic growth has softened this year,” my colleague Heather Long wrote. “The manufacturing sector is in a recession, and businesses have curtailed spending, largely as a result of headwinds from abroad and Trump’s trade policy whiplash.”

MARKET MOVERS

Trump's misplaced anger at the Fed. The president wouldn't be achieving much if the central bank responded to his demands for lower interest rates, Politico's Victoria Guida writes: "Borrowing costs are already ultralow, with corporate bond yields at levels not seen since the 1950s. Leaders of top business groups say that hardly any of their members are having trouble getting loans. And while Trump is right that the dollar is strong — making American exports more expensive — that has much more to do with the relative health of the U.S. economy than with anything the central bank does. All of that suggests the Fed would probably not be able to give Trump what he wants, even if it tried."

Inflation expectations dip. Bloomberg's Matthew Boesler: "Federal Reserve officials worried about sliding inflation expectations won’t take much comfort in readings from the New York Fed’s latest monthly survey of U.S. households, which fell to multiyear lows in August. Expected inflation one year ahead dropped to 2.4% last month, marking the lowest level in the survey’s six-year history, according to the median survey response."

Robert Shiller: Less than 50/50 chance of a recession. The Nobel Prize winner tells Bloomberg he doesn't see the same conditions that predated the financial crisis: "“In September 2008, we had the Lehman bankruptcy and the WaMu takeover and talk then shifted to, is this 1929 again?" Shiller said. "It brought back fearful stories, but right now those stories aren’t so prominent." And he said he expects the next downturn to be milder than the Great Recession: "It won’t be as bad as the 2008 one. Because that was like the worst recession!"

— Real U.S. debt levels could be 2,000% of GDP: “Total potential debt for the U.S. by one all-encompassing measure is running close to 2,000% of GDP, according to an analysis that suggests danger but also cautions against reading too much into the level,” CNBC’s Jeff Cox reports.

“AB Bernstein came up with the calculation — 1,832%, to be exact — by including not only traditional levels of public debt like bonds but also financial debt and all its complexities as well as future obligations for so-called entitlement programs like Social Security, Medicare and public pensions … Putting all that together paints a daunting picture but one that requires nuance to understand. Paramount is realizing that not all of the debt obligations are set in stone, and it’s important to know where the leeway is, particularly in the government programs that can be changed either by legislation or accounting.”

Growth stocks, generally companies that are seeing rapid profit increases, have dropped in seven of the past eight days as measured by Bloomberg’s Pure Growth Portfolio. Meanwhile, a similar measure of value shares, those with the cheapest valuations, are staging a big comeback.
Bloomberg
TRUMP TRACKER

TRADE FLY-AROUND:

— Manufacturing lulls hit Trump country hard: “The surge in industrial jobs seen in the first two years of the Trump presidency has also gone into reverse in some parts of the country,” Bloomberg News’s Shawn Donnan reports. “Nationally, the U.S. has added 44,000 manufacturing jobs so far this year, according to data released on Friday. But that’s way down from the 170,000 added in the same period last year.”

“In 22 states — including electorally important ones like Wisconsin and Pennsylvania — the number of people working in factories actually fell in the first seven months of this year, according to figures compiled by the Economic Innovation Group, a think tank.”

But Mnuchin dismisses trade war pain. NYT's Alan Rappeport: "Treasury Secretary Steven Mnuchin said on Monday that [Trump’s] tariffs on Chinese imports were having no impact on the United States economy, an assertion that was at odds with a raft of increasingly gloomy economic data and industry surveys... 'It’s fair to say it’s impacted the Chinese economy,' Mr. Mnuchin said on the Fox Business Network. 'We have not yet seen any impact on the U.S. economy.'"

— Trump officials expressed concern over farmers’ bailout: “Senior government officials, including some in the White House, privately expressed concern that the Trump administration’s nearly $30 billion bailout for farmers needed stronger legal backing, according to multiple people who participated in the planning,” my colleague Jeff Stein scooped.

“... Two Department of Agriculture officials involved in the bailout program told The Washington Post they were worried the funding could surpass the original intent of the New Deal-era Commodity Credit Corporation, which is being used to distribute the money. The CCC, as it is known, had previously been used only to create substantially more limited programs.”

  • USDA officials weren’t alone: “Separately, some officials in the Office of Management and Budget also raised questions about the scope of $16 billion in a second round of bailout funds. They pushed the Department of Agriculture to provide more legal reasoning for the effort, the officials said. In a statement, a USDA spokesman officials said the concerns raised by OMB were already resolved, however.”
Wilbur L. Ross Jr. made the threat after the agency’s Alabama office contradicted the president’s claim that Hurricane Dorian might hit the state.
NYT
Business
Trump on Monday promised to release a detailed financial report of his personal holdings to the public before the presidential election next year, though he was vague on just what he would disclose that is new.
Bernard Condon | AP
POCKET CHANGE

— Historic moment in the labor market: “The surge of minority women getting jobs has helped push the U.S. workforce across a historic threshold. For the first time, most new hires of prime working age (25 to 54) are people of color, according to a Washington Post analysis of data the Labor Department began collecting in the 1970s. Minority hires overtook white hires last year,” my colleagues Heather Long and Andrew Van Dam report.

“Women are predominantly driving this trend, which is so powerful that even many women who weren’t thinking about working — because they were in school, caring for kids or at home for other reasons — are being lured into employment, according to The Post’s analysis.”

— The hits keep coming for Google: “Attorneys general for 50 U.S. states and territories on Monday officially announced an antitrust investigation of Google, embarking on a wide-ranging review of a tech giant that Democrats and Republicans said may threaten competition, consumers and the continued growth of the Web,” my colleague Tony Romm reports.

“Appearing on the steps of the Supreme Court, Texas Attorney General Ken Paxton charged that Google ‘dominates all aspects of advertising on the Internet and searching on the Internet,’ though he cautioned that despite his criticism the states had launched an investigation for now and not a lawsuit … Some of those attorneys general appeared to raise additional complaints about Google, ranging from the way the company processes and ranks search results to the extent to which it may not fully protect users’ personal information.”

Softbank pushes WeWork to postpone IPO. FT's Eric Platt and James Fontanella-Khan: "SoftBank, the biggest outside shareholder in WeWork, is urging the lossmaking property group to shelve its hotly anticipated initial public offering after it received a cool reception from investors... WeWork’s parent company, the We Company, has been aiming to raise between $3bn and $4bn in its flotation. But it has faced criticism from investors and analysts on Wall Street over its governance, payments made to co-founder and chief executive Adam Neumann and its use of a complicated corporate structure.

"SoftBank and its Saudi-backed Vision Fund have pumped more than $10bn into the office space provider. But SoftBank’s enthusiasm for a listing has waned as bankers have slashed the valuation they believe the We Company can attain when it lists."

— Hedge fund challenges AT&T’s over strategy: “One of Wall Street’s most powerful activist investors is challenging AT&T Inc. ’s ambition to build a media conglomerate and is pushing the company to refocus on its telecommunications roots,” the WSJ’s Drew FitzGerald reports.

“Hedge fund Elliott Management Corp. disclosed a $3.2 billion stake in AT&T, criticized its longtime CEO’s acquisition strategy and called on the company to shed some assets. The investor, which has tangled with Samsung Electronics Co. and the Argentine government, also suggested that AT&T name new directors to its board. The start of a public battle will test shareholder support for Chairman and Chief Executive Randall Stephenson ’s plans to remake AT&T into a media and advertising powerhouse.”

Trump cheered on Elliott's involvement: 

Flashback to November 2015, when Trump attacked Elliott Management founder and chief Paul Singer, a then-Never Trump GOP megadonor, saying there's a "lotta controversy with Mr. Singer." 

— Big Ag wants cut of fake meat: “Bunge Ltd, one the world’s biggest grain traders, recently disclosed the 1.6% stake it had purchased in the fast-growing fake-meat startup Beyond Meat,” Reuters’s Rod Nickel and Tom Polansek reports.

“Bunge’s investment is just one example of how grain traders and seed companies are trying to capitalize on a market that now accounts for 5% of U.S. meat purchases — a share expected to triple over a decade, according to investment management firm Bernstein.”

— FDA blasts Juul: “The Food and Drug Administration, in a harsh warning letter Monday, criticized Juul Labs for illegally marketing its e-cigarettes as less harmful than regular cigarettes and ordered the company to correct the violations immediately or face tougher enforcement actions,” my colleague Laurie McGinley reports.

“The agency said it acted after reviewing testimony from a recent investigation by a House Oversight and Reform subcommittee into Juul’s marketing and promotion practices. The economic and consumer policy panel, in July hearings, accused Juul of ‘deploying a sophisticated program’ to target children and teenagers, including at schools and summer camps, as part of an effort to become the nation’s largest seller of e-cigarettes.”

Jack Ma on Tuesday will step down as executive chairman of Alibaba, the nearly half-trillion-dollar online-shopping giant that he co-founded in an apartment in southern China two decades ago.
WSJ
The Gates episode is another example of late sex criminal Epstein's tireless attempts to contact, influence and advise business titans and other leaders.
CNBC
MONEY ON THE HILL

Warren wealth tax could cost the rich hundreds of billions. Bloomberg's Rich Miller and Laura Davison: "Billionaires such as Jeff Bezos, Bill Gates and Warren Buffett could have collectively lost hundreds of billions of dollars in net worth over decades if presidential candidate Elizabeth Warren’s wealth tax plan had been in effect -- and they had done nothing to avoid it. That’s according to calculations in a new paper by two French economists, who helped her devise the proposed tax on the wealthiest Americans.

"The top 15 richest Americans would have seen their net worth decline by more than half to $433.9 billion had Warren’s plan been in place since 1982, according to the paper by University of California, Berkeley professors Emmanuel Saez and Gabriel Zucman... For Amazon.com Inc. founder Bezos, his estimated fortune of $160 billion in 2018, before his divorce settlement this year, would have been reduced to $86.8 billion. Microsoft Corp. founder Gates would have seen his shrink to $36.4 billion from an estimated $97 billion." (Bezos owns The Washington Post.)

Sherrod Brown to blast Trump's housing finance restructuring plan. The Ohio Democrat, who serves as the ranking member on the Senate Banking Committee, will level some tough criticism of the proposal to top administration officials appearing before the panel today, including Mnuchin. "Unsurprisingly, President Trump and his Administration missed the point," Brown will say, according to a copy of his prepared remarks. "Rather than create a system that addresses the needs of working families, the Trump Administration has put out half-baked proposals that will make mortgages more expensive and harder to get...

"So let’s be clear: whether you’re renting and want to buy a home, or own a home and someday want to sell it, President Trump’s plan hurts you – all to funnel more money to the same Wall Street system that wrecked the housing markets and wrecked families’ lives in 2008," Brown plans to say. 

Mnuchin: More tax cuts coming in 2020. Politico's Quint Forgey: "Mnuchin said Monday that the Trump administration would consider proposing a package of tax cuts in 2020, trumpeting the strength of the U.S. economy despite the ominous financial indicators of recent weeks... 'And regards to a middle class tax cut, you know, we’ll be looking at tax cuts 2.0, something that will be something we’ll consider next year,” he [said]. “But right now, the economy is in very, very good shape.'"

CHART TOPPER

CEO confidence started tanking last year after the trade war escalated. Via Columbia University economist Adam Tooze: 

DAYBOOK

Today:

  • The Senate Banking, Housing and Urban Affairs Committee holds a hearing on housing finance reform, which will feature testimony from Treasury Secretary Steven Mnuchin, Housing and Urban Development Secretary Ben Carson and others.
  • The House Financial Services Committee holds a hearing on protecting student loan borrowers.
  • The Brookings Institution holds an event on using regulations to combat recessions. 

Upcoming:

  • The Financial Services Subcommittee on National Security, International Development, and Monetary Policy holds a hearing on the macroeconomic effects of climate change on Wednesday.
  • The Peterson Institute for International Economics holds an event on a 2019 IMF report on exchange rates and external adjustments on Wednesday 
  • Brookings holds an event on the status of anti-money laundering efforts on Wednesday
  • The Financial Services Task Force on Artificial Intelligence holds a hearing on the future of identity in financial services on Thursday.
THE FUNNIES

From The Post's Tom Toles: